Small Colleges Struggle with Declining Enrollment

Decreasing enrollment at small colleges and universities is a growing matter of concern, college administrators report.

For the sixth straight year, overall enrollment in the nation’s colleges has declined, from a peak of 20.1 million in 2011 to 18.5 million today, according to the National Student Clearinghouse Research Center. Initially, the fall in enrollment centered on for-profit colleges, which took a hit from policies imposed by the Obama administration. Now all categories—public, nonprofit, and for-profit schools—are showing declines.

‘A Negative Outlook’

In a January 2018 report titled “U.S. Higher Education Sector 2018 Outlook: Additional Credit Pressures Spell a Negative Outlook for Institutions,” Financial services research organization Standard and Poor’s states many colleges are at “a difficult operational crossroads” because of “students’ continued expectations of increased college affordability and lower tuition and debt” combined with their “demand [for] more and better facilities, services, and general college experience.”

The drop in attendance is occurring while the overall U.S. population in the college age group is increasing, though it experienced a slight dip in the past three years. “Between 2000 and 2015, the 18- to 24-year-old population rose from approximately 27.3 million to some 31.2 million,” the National Center for Education Statistics reported in 2017.

The Council of Independent Colleges, a national organization of private, nonprofit colleges, issued an upbeat report in August 2017, saying, “While small and mid-sized private colleges and universities face many challenges, a review of their financial health over the last 14 years provides ample reason for optimism about their future.”

In January 2018, however, the Council peppered its annual Presidents Institute meeting with sessions on “Enrollment, Marketing, and Today’s Students: Getting Them and Keeping Them,” “Lower Cost Models for Independent Colleges,” and “Presidential Considerations for College Mergers and Acquisitions.” Rick Seltzer of Inside Higher Ed reported in January “a heightened sense of concern underpinned much of the organization's annual Presidents Institute this year.”

Problems for Oberlin

Oberlin College, a liberal arts school in Oberlin, Ohio, illustrates the growing problem of declining enrollment. Oberlin is an elite college, accepting only 28 percent of its applicants and charging more than $69,000 a year. It has an endowment of $770 million, but a $5 million gap between income and expenses during the 2017-18 academic year has spurred a salary freeze and campus-wide cuts.

The immediate cause of the deficit was a decline in enrollment in the fall of 2017. The school expected 2,895 students, but only 2,815 enrolled. “This not only strains budgets for the upcoming fiscal year, but also points toward a much larger budgetary issue that has been brewing under the surface for years,” wrote Sydney Allen and Alexis Dill in the college’s newspaper, the Oberlin Review, in September 2017. The school had already offered early retirements, cut faculty research grants, and left jobs unfilled, the article reported.

A national enrollment decline of 8 percent over six years may not seem severe, but it is giving college administrators the shudders, especially those who head small colleges in out-of-the-way places.

“Oberlin’s numbers show just how razor thin the margin of success or failure can be in the world of elite liberal arts schools,” Alana Dunagan, a researcher for the Clayton Christensen Institute, wrote in January 2018.

Mergers, Threatened Closing

Other schools are facing hard times, too. This past fall, Wheelock College, primarily a teachers college, was merged into the much larger Boston University, a private school about a mile away. Sweet Briar College, a respected women’s school in Virginia, announced it was closing its doors in 2015. Alumnae fought the closure in court, and the school was “rescued,” but the total enrollment in fall 2017 was only 300 students.

Shimer College, a Great Books school (an institution following the tradition of studying the classic literature of Western civilization), merged with North Central College in Naperville, Illinois after Shimer’s enrollment fell below 100.

Devaluing the Four-Year Degree

David Riggs, a board member of the James G. Martin Center for Academic Renewal, says a four-year degree isn’t as good a deal as it once was.

“The value proposition of a four-year degree is less today than it was decades ago,” Riggs said. “Costs have gone up while average starting salaries for graduates have decreased,” Riggs said. “Students are recognizing that fact and exploring alternatives. Consequently, there’s downward pressure on the demand for college. That pressure is likely to spur consolidation in higher education, creating mergers and acquisitions and school closings.”

Loans ‘Harder to Bear’

Ashley Thorne, executive director of the National Association of Scholars, says the prospect of crippling personal debt is a turnoff to would-be students.

“Enrollments are decreasing as the burden of student loans becomes harder and harder to bear,” Thorne said. “Colleges are in a moment in which they must prove the value they provide. The best value colleges can give is not just financial return on investment but equipping students for life as citizens, imparting to them wisdom and virtue and teaching them to pursue the truth.

“Much of the rise in costs comes from colleges losing sight of these priorities and spending money instead on identity politics, campus amenities, and administration,” Thorne said. “Americans are growing tired of paying for fluff when there are alternatives on the rise.”